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Creating loyal clients means getting to know who they are and understanding—as well as anticipating—their needs. That’s why collecting and analyzing data is the foundation of any successful loyalty strategy.

Wise Marketer Group recently published a report stating the most common reasons why loyalty programs fail. At the top of the list? Poor use of data. The report also notes issues such as inadequate communications and dialogue, friction, lame rewards, and inability to prove program performance.

When clients enroll in a brand’s loyalty program, they share information that, at the very least, permits a company to identify customers as well as follow and reward purchase behaviour. As those relationships evolve, more data will be shared, and companies can collect information related to transactions, behaviour, purchase and social preferences, and more.

In exchange for sharing this information, program members expect a brand to understand their needs and personalize their experiences. And this is precisely where far too many programs fail to deliver.

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1. Data collection

One error many programs commit is requesting too much information from members upfront. The enrollment process should be simple and request only the most basic information. Members can then provide additional data as their relationship with the brand grows. Note that this information should be structured and reliable, and collected in a transparent way, in order to meet with all current privacy rules and regulations.

The only way to get a full, 360º view of any client is to create a centralized customer database from a selection of transactional and non-transactional sources. For instance, sales, social media information, survey results, website and mobile apps info, and more.

By centralizing client data, brands can paint a fuller picture of their customers with every transaction. That means companies can put together personalized ad campaigns, communications, and experiences. In other words, create more authentic relationships. In addition, personalization can be done in real-time across various channels when enough data has been collected.

2. Personalization

Data analysis is the foundation of any solid loyalty strategy. It lets you better understand your customers. As a result, you can communicate the right message, on the right platform, at the right time. Inadequate communication and dialogue is listed in the Wise Marketer Group’s report as the 3rd reason why loyalty programs fail.

Personalization means more than just including “Hello, First Name” in your communications. It is also how often you communicate, what your message is, which products and services you recommend, and how you reward customers. When it comes to personalizing your communication and interaction with clients, more than anything you need to be relevant.

Remember that badly executed personalization is worse than not personalizing at all. Large-scale personalization requires a combination of usable data and the right technology. Which brings us back to our first point: Be sure your data is structured and reliable.

In short, data collection is key to any successful loyalty program. By placing your customers at the centre of any loyalty experience, you’ll be able to achieve your business objectives. To do so, however, you need to adapt your processes, change your internal business culture, take a closer look at the technology you use, and get everyone involved. Your program’s success starts with the proper use and optimization of customer data.

Would you like to take action to forge lasting relationships with your customers and think holistically about your loyalty strategies? As loyalty experts, we offer strategic and operational support for companies looking to be proactive and stand out from the crowd. Contact us to find out more.